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tv   U.S. House of Representatives  CSPAN  October 15, 2013 2:00pm-4:01pm EDT

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plan as well that was put forth late yesterday by senators harry reid and senator mitch mcconnell which would reopen the government again through january 15. so the same agreement on that part of the measure. between the house and the senate. also allowing the treasury department to borrow into february. but it would require an income vary kay figures under the affordable care act under the senate version and would set up the framework for further budget negotiations. so that's the difference between the house and the senate plan. again, we're keeping an eye on both chambers, both bodies and leaders from both parties. carl is joining us from washington, west virginia. on the republican line. what's your take on all of this, carl? caller: yes. i have a question. >> sure. caller: i've been hearing republicans and a few democrats talking about president obama and the a.c.a. bill and they're saying it's constitutional. if that was so, it's
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un-constitutional, why doesn't anybody looking at him to put a brick in the law? >> ok. on the republican line. we'll go to the democrats' line next. ronnie from vivian, louisiana. what part of the state is that located in, ronnie? caller: northwestern part of the state. >> welcome to the conversation. caller: well, i think it's a shame whenever small fascist groups can come in and take over the congress and boehner can't do anything with his party. you get them in line and they're going to sit here and shut the government down and i think it's also -- that they also need to pass some kind of aw that makes it where if they -- paying bills at all that it be considered treason. this is ridiculous.
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you're not doing good for your country when you do that. >> ok. ronnie, thanks for the call. on our facebook page, you can join in on the conversation at facebook.com/c-span. and we're also getting your comments on this question. can a debt ceiling deal be reached? this is unscientific survey but many of you weighing in. you can say yes or no and share your comments on our facebook page, facebook.com/c spmbings an. sandra, maryland, democrats' line. good afternoon. caller: hi. good afternoon. i'd like to start off by saying there is a real plus to all of this which really isn't visible. and for me as an american, it's been an education in federal government 101. for all the essential and critical services that our government provides because we just hear this kind of bad news all the time, but i think it's shown us the full reach and the full services that are
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provided. and then i'd also like to comment on the previous caller here about treason. this is -- i call it homegrown terrorism tactics. and i don't think that we call terrorism -- what do we call it here? disagreement. if this had been a foreign agent of some kind who had shut down our government, threatened the debt ceiling, they would have been arrested by now, and i would really like to see these nameless republicans because for me you hear a few -- a few names. i'd like to see them named with their pictures. i'd like for them to be identifiable for the next election, for people who do not agree that homegrown terrorism is an acceptable form of government. and another thing. i thought if it were possible, which it isn't, i'd just go
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down the road an hour and a half from now, walk in and do a citizens arrest. i think these people should be faced with criminal charges, as the previous caller mentioned. this is not acceptable government, and maybe they should be faced with civil charges and have to pay the wages of all the people who lost their money in this criminal event, because i do not feel that freedom of speech does not mean to be allowed to do harm to others. and maybe they could take a note from doctors when they do their oath to do no harm, maybe that should be part of their swearing-in ceremony, to do no harm. and maybe you all could list the harms. i'd like to see the list of the harms done, because i think that allows accountability for these people's actions. i'd like to -- i'd like to see them named. i'd like for them to be held
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responsible, and for them to name the affordable care act as obamacare, that was just sential dirty kinds of manipulation on people. i saw a program where they went on the streets and asked people on the street, would you rather have obamacare or the affordable care act? ll of them, all of them said the affordable care act. >> sandra, thanks very much for the call. mariano has this tweet. >> let's bring you up to speed of where things stand at this hour. we're keeping an eye on the senate stakeout where we'll ar from -- the headline from politico.com, the budget battle escalates. the words begin, house republicans scrambling this
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afternoon to rewrite their bill, to lift the debt ceiling and reopen the government in a bid to attract enough conservative support to ensure passage. we heard from the former house speaker, nancy pelosi. she said she doesn't think the speaker has the votes in the house to put forth his plan. and so now speculating, according to "the hill" newspaper that house republicans are putting in what they call sweeteners to encourage more house tea party republicans to support the plan. so that's basically where things stand now. again, as we hear from senate lawmakers, we'll take you there live. meanwhile, we'll hear from you. james, huntington, maryland, independent line, good afternoon. caller: hi. how you doing? >> hi. caller: i'd like to reiterate what the last two callers said. to me this seems almost on the edge of treason. these people are shutting the
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government down due to their own political games or whatever they're trying to accomplish. another thing i want to cover is mr. boehner. mr. boehner answers questions without giving answers. i mean, he plays political dodge games every time somebody asks him a question. the last -- the thing this morning i sat and waited for the little press conference they had this morning. it was supposed to be in five minutes. i think i sat in that chair and waited 45 minutes for him to say a word and he didn't say nothing. it's ridiculous what they have done to this country. not only that, their main objective is to attack things like social security and the v.a. i mean, these people -- i'm a veteran myself 1971. i still got the letter richard nixon sent me. these people should not be allowed to hold in government up and stop it. my wife is a government employee. works with treasury. that's she's been home for two weeks and it's driving her
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insane not to go to work. but other than that, these people need to get their stuff together because there's millions and millions of people that they are affecting with their little games and their ttle trying to get one upsmanship. it's not good to hold this country, and they are holding it hostage. >> james, thanks for the call. in about an hour and seven minutes, the president is scheduled to meet with the democratic leadership of the house led by nancy pelosi. if they speak to reporters following that session, we'll have cameras as well to get the latest from the house democratic leadership. good afternoon. caller: i'm just wondering, both parties seem to be able to agree on one thing and that's they don't want to raise the debt ceiling. well, if they can agree on one thing, why can't they agree to not shut the government down? and for your previous callers, i don't believe the republicans
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have america held hostage. next year when you, your family member gets hurt or needs surgery, the hospital won't be able to help you, you'll be thinking about this call you just made because that's what this is about. they don't want you to be in control of obamacare. that's all it's about. it's not holding you hostage. it's not frying to keep social security or v.a. or anything else for that matter from going out. it is to take care of you. in the future. your children, your grandchildren. but you're not seeing it. all you're seeing is what the democrats want you to know. and also, sir, you know, the ohio caucus city mayor, these people walking around, nobody can wind it, what's up with that? that's all i have to say. >> interesting point, jackie. thanks for the call and the comment. we're not exactly sure specifically responsible for winding that clock but "roll call" reporting last week that the clock is no longer
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operational. it will resume operations once the senate is fully staffed. of course, like all of the federal offices, the white house, capitol hill and the federal government working on much smaller staffs these days because of day 15 of this government shutdown. meanwhile, russell berman of "the hill" newspaper -- >> we expect to hear from senate democrats and republicans where things stand as well. diane from north carolina, democrats' line. good afternoon. caller: hi. i want to make a comment. as these weeks have passed on, my husband happens to be a federal worker. we have somehow by the grace of god been given a pass. he actually has a contractor who has a valid work from home
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agreement, so we've been given, like i said, by the grace of god, been able to be saved from this or we'd already been in financial ruin. but one of the things i think is just not being discussed is that the people who are looking at the leaders of this movement to shut the government down and hold the government hostage, there -- i think the paradigm is that they are thinking that they're motivated by the same things that motivate the rest of the politicians, power, money, constituents' support. as i watch this unfold, i think that it's really important. i don't think they're motivated by that. i don't think whether they get re-elected or not. they're purely motivated by their extremist ideology and that's really hard to reason with. it doesn't matter what the polls say. it doesn't matter what the constituents say. they are so hard lined, motivated by their ideology and i think that in order for this
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conversation to change, there has to be a really hard look at what the motivation is of the people that are holding this whole process up. that's really my only comment. i just have been stopped by so many people, surely they'll change now. look at their poll numbers. certainly they'll loosen up position. it's not their motivation. we're looking at it completely the wrong way. i disagree with their stance, but i think that the -- that we're trying to deal with apples while they're dealing with could you curvers, apples pasta. bers, apples and >> obamacare is a blight on this country. do not fund it. president obama has disrespect for our veterans, our military and our religious froomeds.
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and this headlines from washingtontimes.com. >> hank is joining us on the republican line from maryland. good afternoon. caller: yes. i'd like to make a statement what's going on. >> please do. >> i want all these people out here to listen to me carefully. this is not a republican or a democratic issue. this is an american issue. five days before barack obama was elected, he said in five days we're going to fundamentally transform the united states of america. that's exactly what he's trying to do. i think nancy pelosi ought to introduce a bill in the congress that says, instead of being the u.s.a., we ought to be the ussa, the united socialist states of america and make barack obama the czar or the dictator, because that's what he wants to do. and mark my words, if he can he's going to try to pull some maneuver so he can be president as long as he wants to be. mark my words.
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bake up, you sheep -- wake up, you sheep out there, that are following him over the cliff. goodbye. >> both the house and senate remain in recess at this hour. amber is on the phone. austin, texas, independent line. go ahead, please. amber, you with us? caller: hi, can you hear me? >> sure. go ahead. caller: ok. well, i'm frustrated because of the republican actions that aren't like treason. they actually are treason. the man is acting like a dictator. and what frustrates me about the democrats is they are not bringing it up, they're not being honest about it. they're still being nice. they shouldn't be calling people friends on the other side of the aisle. they should be calling them enemies and impeaching them, you know. you know, the last gentleman that spoke, i mean is so clearly insane, delusional or something. i mean, people need to come out and say this is delusional
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behavior saying that the president is acting like a socialist. you know, socialized health care means it's for all. it means everyone gets it. i mean, anyone who could be against health care for all is a sociopath because they're saying that some people just deserve to die. and that's right out of eugenics. are the people that deserve to die various dejen rits. -- degenerates. just like the nazis said, they deserve to die. and to let our government go into an economic collapse so people will live is absolutely insane. i can't believe more people aren't up in arms about it. it's like we've gotten so used to delusional behavior that we ignore it now because no one is brave enough to say anything about it. i mean, we're talking fascism and delusional sociopathic
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behavior. the republicans clearly are only representing corporations. >> ok, amber, thanks for the call. couple more comments. this is from one of our viewers. the hash tag is #cspanchat. the house has passed c.r.'s, those continuing resolutions and appropriations. and the headline from nytimes.com at this hour. >> that's where things stand at this hour. ary, seat, washington. caller: this is gary from des moines, washington. i'm a veteran. 22 years' service. silver star, bronze star, purple heart. >> thank you for that. caller: it pains me to watch people like sara palin and cruz
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standing in front of a -- sarah palin and cruz standing in front of a group of veterans badmouthing the president of the united states. where is the social conscience of the republican party? why don't they care about 30 million americans who have no means for obtaining insurance? why can't -- how about food stamps for people who go to bed hungry, programs that feed children? where is the social conscience of the republican -- side of the republican party? this president's a great president and he has done much and continues to work towards bringing the country together and fix the broken nation that we've become. i'm disappointed. it's hard to go to bed at night feeling like -- feeling like this. and mr. boehner, mr. boehner, cajones have some
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and allow democracy to work and bring votes to the floor and let americans vote and not do this secret behind-the-back special legislation that doesn't allow a vote to come to the floor. nyway, this is one broken-hearted veteran that's feeling bad for our nation. thank you. >> thank you for the call. on the twitter page, #cspanchat -- harry reid said he was "blind-sided" by news that house republicans were moving forward on their own debt limit bill and disappointed that speaker john boehner for doing
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so. that from the senate floor earlier in the day next is jim joining us from tampa, florida, independent line. caller: thank you. as an independent i'd like to thank senator cruz and also lee mike. i'd like to thank them for what they did. it's obviously the republicans which put a nail in themselves by caving to the democrats and to obama because next thing they're going to do, they're going to have amnesty and say goodbye and we become a one-party country. republicans will be a small minority. they'll be gone because all republican supporters will leave them. you might see some -- maybe conservative tea party third party.
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i hope to see that. >> jim, let me ask you this question because we've had a number of calls in the last few days talking about a third party. who would lead that in your mind? give me some names. >> i think ted cruz is a possibility. i think lee is a possibility. there's -- i think louie gohmert is a possibility. out of utah. are they too corrupted? i have my curby job. do i want to change? because unfortunately when everyone goes to congress, goes to washington, they become corrupted and changed like -- was once ho has a tea partier. >> thank you. we'll take you to a hearing, the small business committee is looking at the impact the
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shutdown has had on them. also, by the way, all of our events are streamed on our website. he can check them out anytime on c-span.org. we thank those joining us on x.m. radio. starting on friday it will be x.m. channel 120. so we help you tune in. mary is joining us. republican line, castle rock, washington. caller: i think the people need to wake up. obama is president and he refuses to negotiate. and we need a president that is willing to negotiate to solve all of our problems. and it's not just one problem. this belongs to the whole united states. republicans, independents and democrats should all be equal. and we have a president that is strictly for the democrats and nobody else. and for himself. >> ok. thanks for the call. that was illinois senator dick
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durbin who just walked by so the party lunches have wrapped up. we expect to hear in just a couple minutes from senator reid and presumably we'll also hear from senate republicans as well. reporters gathering in the area known as the ohio clock on the senate side of the u.s. capitol. kevin is joining us on the democrats' line from new orleans. caller: hi. good morning. good afternoon. how are you doing? >> fine, thank you. caller: hey. m a member of the americorps and part of the sacramento class campus and we're under way right now, we're supposed to leave out to go doing things and getting things done for america. and i'm afraid if we don't get a chance to get out there in enough time to sacramento and start our corps training institute we won't have enough time to meet our goal of 1,700 hours to obtain our education.
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>> i'm going to stop threw. thank you for the call. senator reid about to go to the microphone. let's take you to the ohio clock area. we're expected to see senator reid at the podium in just a moment. so let me explain to you what happened a moment ago. reporters gathering, waiting to
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hear from senator harry reid. he walked by. many expecting him to come to the podium as he traditionally does. he did not do that and based on what we're able to see from our advantage point, there's a question as to whether or not he will speak to reporters but obviously you can see the scrum, those reporters lined up, gathered with a lot of questions. expecting to hear from the senate democratic leader following the traditional tuesday lunches. we'll continue to monitor what's happening in this area and continue with more of your phone calls. bud, thanks for waiting. kansas city, missouri, on the republican line. caller: well, thanks for having me. just observing this, i'm 77 years old, i worked all my life for everything, whatever that is, but the thing i keep asking myself, when is enough debt and raising the debt ceiling, when is enough enough? i mean, $40 trillion in debt,
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$50 trillions? how much more money does obama need? for our government to spend? and that one caller about taking care of society, our government has a lot of things that take care of society. not only government but churches and all kinds of organizations. but i don't understand how you can keep raising the debt limit , we're $16 trillion, $17 in debt now, i guess my question to anybody, including the senators, when's enough enough? don't they have an idea that $40 trillion might destroy the united states? >> ok. bud, thanks for the call. meanwhile, trish malloy has
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this, #cspanchat saying thank you to #cspanchat. you're the only one honoring the core of this country. let's more from joe and jane public. annapolis, maryland, independent's line, good afternoon. caller: hi. if enough members of congress don't like the affordable care act, they should draft a bill and get it passed. this one has passed. the president ran defending it. he won. and i've worked in health care my entire life. if you you've ever seen people with pre-existing conditions that lose their insurance and have nowhere to go, this bill has done a world of good for that segment of the public which could be anybody. i voted in the past for both republicans and democrats, but i will never ever vote for a republican again. the iraq, afghanistan were the first wars where we waged war without increasing the taxes to pay for them so of course we increased our deficit.
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and boehner is the worst speaker in 236 years of congress. the debt goes down under obama and clinton. it skyrocketed under both bushes. and i -- you know, although i'd like to say i could vote both parties, i can no longer do so. >> we'll leave it there. thanks for the call from annapolis, maryland. reporting on "the wall street journal" website. criticism from the white house saying they want to work with senate democrats and republicans and have the house vote on that measure. so a big question mark as to who will make the next move in
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the house and the senate. the senate is back in session at this hour. the house is still in recess. but earlier in the day on the senate floor the democratic leader, harry reid, had this to say about the house republican plan. >> the house republican leadership's plan that's now out and people have been taking a look at it, it's a plan to advance an extreme piece of legislation and it's nothing more than a blatant attack on bipartisanship. these past several days we've been engaged in productive, bipartisan negotiations in the senate. everyone knows that. we've been working across party lines to achieve an agreement that reopens the government, protects the full faith and credit of our great country and opens talks to put this country on a firm fiscal footing. everyone needs to know that the measure under discussion in the
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house is no part of what we've negotiated here in the senate. r. president, the debt is here . the deadline is looming. rating agencies are talking about downgrading us as early as tonight, again. i know i speak for many of us who've been working in good faith when i say we felt blindsided by the news from the house. but this isn't the first time. extremist republicans in the house of representatives are attempting to torpedo the bipartisan senate's compromise, can't pass the senate, won't pass the senate. the house measure would take
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away the president's fundamental authority that's been in existence for as long as political science can remember. it's been in place decade after decade to prevent a catastrophic default on the nation's bills. tea party republicans are trying to take authority away from president obama. they would never, ever consider doing this if it were president romney, president bush or resident bush or president reagan. never. but as they've said and they've cheered over there, the government's closed. we don't mind defaulting on the debt. it's good for the country. hat's what they've said. their legislation would also make unacceptable major changes to obamacare.
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house legislation doesn't even include a process for bipartisan negotiations on a sensible long-term budget. they just throw out these numbers and think magic's going to happen and somehow comes january 15, everything will be unky dore. there's still processes we have to follow. no basis, no schedule to do that. for weeks republicans have claimed they want to negotiate. but their legislation completely ignores the need to work together to craft a budget and put our country on a fiscally sustainible path. for years, mr. president, they've complained about, why don't we have regular order here? they complained about a lack of a budget. now, they don't want to negotiate a budget. hard to comprehend this logically. but, mr. president, the tea party-driven part of the republican party doesn't follow
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logic. why would they want to close the government for 15 days, ?ave us default on our debt introdust of this measure by house republican leadership -- introduction of this measure by house republican leadership is a waste of time. let's be clear. the house legislation will not pass the senate. and here's what the white house said just a few minutes ago. "the president has said repeatedly that members of congress don't get to demand ransom for filling their basic responsibilities to pass a budget and pay the nation's bills. unfortunately, the latest blow in house republicans does just that to appease a small group of tea party republicans who forced the government to shut own in the first place." i'm very disappointed with john boehner who once again would
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try to preserve his role at the expense of the country. i've worked hard to rise above partisanship to find common ground in the senate. and mr. president, we've done that together for the good of the nation. this is much bigger than the senator who's presiding from e state of hawaii, the assistant leader, to my side. this is much bigger than that. it's much bigger than me. it's much bigger than two senators who are here from connecticut. the senator from -- we have the senator who's chairman of the budget committee, senator murray. it's bigger than her. it's bigger than the senior senator from new york, senator schumer. mr. president, we have to start working together for our country. that's what we've been trying to do. this is so disappointing.
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on the eve of financial destruction for this great country, and that's what it is, to appease a small group of people over there, so disappointed. >> will the senator yield for a question? >> i'd be happy to. >> i'd like to ask the senator, the majority leader through the chair, one of the key elements in this new proposal from speaker boehner is to diminish this president's authority to deal with a default on our national debt. this authority, so-called extraordinary measures or emergency measures, gives to presidents going back to president kennedy the wherewithal through the treasury department to try to avoid an economic disaster which could impact families, businesses, jobs and the reputation of the united states and the world. i ask, through the chair of the majority leader, now that we have seen the republican party
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bring us so close to the press pus on default, -- precipice on default, it -- i don't think they would surrender this authority to keep america safe in light of this threat, is this one of the key elements in terms of the problems associated with the boehner proposal? mr. president, to my friend from illinois, senior senator, we've seen what's gone on these last few months, this whole year with a group of people who are out giving press conferences, holding demonstrations, they want the government to stay closed. they want it closed in the first place. the hardship we have all over this country is really, really awful. and then if that's not good enough, they're out boasting
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that they want the country to fail its obligations to pay its bills. these are not new programs. .hese are obligations we have and then -- i mean, that's one of the things. e proposal they have would not allow, for example, my riend is the chair of the most -- some say the most important part of the federal government, protect the safety and security of the united states, subcommittee dealing with defense. that was led by many, many decades by the late senator dan inouye. this proposal they've sent gives the president of the united states, the chairman of the joint chiefs of staff no flexibility whatsoever -- whatever, when sequestration kicks in on the 15th.
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we're not asking them to change those numbers. we agreed to those numbers. they won't allow flexibility to allow the department of defense to shift that money around. i do not know how the defense of this country can go forward if they don't have flexibility with losing $22 billion beginning january 15. they don't give the authority for that. the bill they're sending over here is doomed to failure. it's doomed to failure legislatively and it's so awful, awful for our country. >> senator harry reid, the senate democratic leader, made those comments following the announcement from house republicans on an alternative plan, different from the plan being worked out by senate democrats and republicans. we showed you earlier the area of capitol hill known as the ohio clock on the senate side. it was full of reporters just about 10 minutes ago. you can see photographers and reporters packing up. the expected stakeout with members of the senate leadership did not materialize.
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this may be the reason why. from "the hill" newspaper, senator mitch mcconnell suspends talks with democrats. just a short while ago senator mcconnell was walking near reporters. let's watch. this is how the scene unfolded.
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>> and in the midst of those reporters, trying to get new information from the senate republican leader, mcmcconnell, but no formal statement from the podium. so the area will -- the reporters will leave for the moment. we expect later in the afternoon to hear from house and senate leaders. let me go back to the story from "the hill" newspaper.
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so those changes put in place by house republicans, the question is whether or not the speaker of the house has the votes in his own chamber to get it through the house of representatives. meanwhile, on capitol hill, a hearing on the impact the government shutdown is having on small businesses. we'll take you live with senator mary landrieu, democrat of louisiana, as she leads off some of the questioning on -- before the senate small business committee. >> approve 53,000 loans to support over 30 business and small business lending through s flagship 7 ha and 504 loan programs. every day the government is shut down an average of 150 loans totaling over $93 million
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are not being processed. the export import bank is under the -- the export-import bank is under the wheelhouse of this committee. what about that bank? last year, 88% of the export-import bank transactions were from small business loans totaling $1.6 billion. that bank today is not currently operating. translate that to $16.7 million a day of lost transactions for small businesses all over america. now, let's take the i.r.s. i promise you this is not going to be on the favorite list of house republicans to open it up. it's not one of my favorite agencies either. however, many small mortgage lenders and real estate agencies are in danger of seeing transactions put on hold because by law any mortgage loan approved is subject to the review by a mortgage lender of at least one year's worth of federal tax returns. if they can't get one year's worth of federal tax returns verified by the i.r.s., all of these mortgages and loans are
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tied up. so that you can see what our situation is here. so let me in closing say we have a wonderful collection of small business owners today who i know you are eager to tell your stories. i look forward from hearing you all. i'm going to turn to my ranking member when he arrives. but until then, let me in order of appearance recognize the senators just for a very brief, you know, one minute or two opening remarks and then i'd like to introduce our panelists. >> thank you so much, chairwoman landrieu, for putting this hearing together in such a short period of time. i want to assure the witnesses, we understand that your time's valuable but your stories are extraordinarily important. and this opportunity to really tell those stories i think is critical to impressing upon people that there is more that is hurt than just feelings here. there's more than what's hurt than just our emotion.
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this may come as a surprise, this committee is a committee that i worked very hard to be on because north dakota in fact is affected almost more than any other state with the s.b.a. shutdown. my home state of north dakota actually ranks number one in the number of loans per capita based on dollar values secured through the s.b.a. the agency reported that in fiscal year 2012 it granted most $28 million or $152 per resident of loans in north dakota. in the first four months of the current fiscal year, the s.b.a. provided twice as much financing compared to the same period in 2012. you might know that north dakota is undergoing a huge economic boom. but what's really tragic here is that this opportunity that small business people have of taking advantage of this economic opportunity in north dakota is being stifled every
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day. and tragically, the place where is it is being hit the hardest is our indian reservations. i can tell you very sad stories, but i think it's important that we hear your individual stories and not relay the ones that we have from home. and so i'd ask that my full opening statement be available for the record. >> without objection, thank you. senator cardin. >> well, chairman landrieu, thank you very much for bringing us together. thank you for pointing out so frequently on the floor of the senate, in our caucus, to the american people harm being caused to this country as a result of the shutdown of government. i represent the state of maryland. we have 10% of our work force that works for the federal government. 10% of our work force. that's had a huge impact on the maryland economy. so we know about that 10%. e know about that 125,000 or 130,000 workers that are furloughed.
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it's having a major impact on small businesses in our state. i stopped at a restaurant last week near the baltimore beltway and i know the owner and i asked him how things are going. he said terrible. he said we don't have the federal workers who usually come in here and have lunch. i don't know how much longer that welcome deal with our current situation with the government shutdown. so businesses are hurting. i want to thank all of the guests that we have here today that are going to relay their particular stories. i'm particularly pleased that we have so many on the panel that have a maryland connection. we talk about the federal workers would help out the employers that do contract work for the federal government. that's a huge number in my state and around the country. i'm glad that lisa firestone is here that will be able to talk about the fact that 90% of her revenues are in jeopardy because of the shutdown. she helped save money for the federal government in the work that you do for loss days and
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the worker comp costs. we know the great work that do you. we want to see you at full strength. and to sabrina poole, a woman-owned small business, 25% of her revenues are jeopardized because of the shutdown. i want to thank sally robertson and ron paul being here to explain what this will mean from the point of view from the s.b.a. in activities as it affects the businesses done by their financial institutions. this is important for you to get your story and it's important that -- i thank you for being here. >> senator levin. >> thank you for your great leadership here. small business is getting clobbered by this government shutdown. each of us have probably dozens of stories. i have about a dozen in my stament which i would ask that you put in the record. i just use one of those stories and that's about trying to pick out the one here which maybe somehow or another will resonate. little fairy service that runs
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up in the northwest part of the lower peninsula. a ferry that runs hunters and hikers and bikers to a little island in the sleeping bear dones lake shore. that ferry can't run. five runs a week was all it was doing, 50 people on each ferry. about 250 people at about $35 each. that's the income of that ferry service. it can't run. it's about $8,000 in lost fares per week. small business, one of, again, a dozen that i'm setting out here in my opening statement. the only point i would make other than that, madam chairman, is this. everyone wants us to negotiate. it's obvious we should negotiate. it's obvious the negotiations have to be bipartisan. the real issue is whether government's going to be unctioning while we negotiate. that, everybody ought to join in and say of course government
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should be functioning while you negotiate. that's the issue. and i would hope our small business people will let their own representatives and senators know how important it is that government reopen, negotiate, of course. but for heaven's sakes, pay our bills while we negotiate but please, please get government open again while these negotiations take place. so again, my thanks to you, madam chairman, for your tremendous leadership, not just in this committee but publicly on the floor of the senate and so many other ways, you are indispensible in this effort. >> well, thank you, senator. i appreciate that. you've been a leader for many years yourself. i'm going to ask each member, because we have a large panel, and it's unusual but we set it up this way so we could be both formal, if necessary, and informal in questions and back and forth. let's start with you, ms. smith, if we could. introduce yourself and for one
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minute give kind of your views about your business and how it's being affected. and then i have questions to throw out to all of you as we continue this hour and a half hearing. thank you. >> ok. >> and you have to speak right into this microphone because it's a little bit difficult. you have to kind of lean in and speak right into the microphone. >> ok. my name is joanie smith. i'm president and c.e.o. of global commerce and services. we are an information technology company based in new orleans, louisiana. i am currently in d.c. because i have meetings with private industry clients. originally, i planned on meeting with federal government agency clients. however, they're unavailable due to the shutdown. we are not able to meet with our small business representative, our contracting officers and our contracting officer representative at the agencies to get assistance
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since they are furloughed as well. g.c.s. was started with me being an independent contractor while working my own contracts before branching out to other agencies. we managed to get a line of credit for our business while using my property as collateral. i've been asked to talk about the impact of the shutdown and how it has affected me and my company. the most compelling thing that has happened as a result of the shutdown is having my resources at home and not billing my usda contract in new orleans. the contract started september 1 of 2013, with three resources and we received a stop work order two weeks ago. usda is one of our major agencies we work with. in the interim, we are still paying salaries, health insurance and other benefits for resources with hopes of
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starting back on our contract soon. we currently have a total of 17 resources covering our contracts. g.c.s. is a $2 million company in revenue, payroll is $33,000 per month, and insurance is $3,800 per month. we have approximately $60,000 in reserves that we can use for payroll. we are doing our best to keep our employees working since they have already started the contract before the furlough. another two weeks of the furlough, it will make it tough for us to continue to pay our employees who are not billable at this time. another three or four weeks of the furlough, we will definitely have to have our own furlough. there are contracts which we are anticipating awards. however, they've been placed on hold because of the furlough. g.c.s. is pushing for the
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furlough to end so we can put our people back to work. >> thank you, ms. smith. mr. lee. >> thank you, madam chair woman. senators and fellow entrepreneurs, i wanted to take a quick moment to thank you for the opportunity to tell my story about the success and the plight of my company. t.l. technologies is a specialty manufacture of precision metal components supplying brand named manufacturers and worldwide markets. since its inception, the business has grown rapidly from an idea and is now poised with recently awarded projects to double in size in 2014. to truly appreciate the predicament that we find ourselves in today, i believe it's really important for you to understand the investment that i, my family and my business partner have made to build t.l. technologies, to be a $1.2 million company. we currently employ three
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people in the manufacturing sector. we were about four weeks into the process of securing additional capital to support the new business and we were being backed by an s.b.a. 7-a loan and we missed the window when the government shut down so we can't proceed with the purchasing of our equipment. we had to stop about $600,000 worth of equipment from moving. e eyedled riggers, electricians, employees. we offered two offers of employment to two machinists who would make combined salaries of around $130,000 a year with full medical benefits. we had to rescind those offers and we are completely and absolutely in a stall mode at this point. >> thank you. ms. firestone. >> chair landrieu and distinguished members of the
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committee, thank you for this opportunity to testify this afternoon. my name is lisa firestone. i'm president and c.e.o. and owner of manage care advisors, a woman-owned small business founded in 1997 specializing in employee benefits and workers compensation. i also sit on the board of women impacting public pop is i r w.i. -- public policy or wipp. since 2005, our federal agency customers have projected workers' compensation savings of more than $100 million which ,000 es $440,000 -- 440 avoided loss time today. we have 90% of our revenue, we have 39 employees in 16 states. we expect to higher 25 additional employees during 2014. in many ways, our growth through public sector
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contracting is a success story that this committee seeks to promote. yet, our company has been thrown into turmoil since the government shutdown. the new staff we've hired cannot complete their required security clearance so i'm forced to carry them longer than anticipated. new hires are also held up because the everify system is not operational due to the shutdown. my 39 employees are working. however, it's uncertain when the company will be paid. in order to meet our financial obligations, we will be drawing on our line of credit, which we estimate can cover us for 60 days to 90 days and no longer and we're paying an interest rate of 4.5%. during wipp's annual meeting in washington, d.c., last week, many women came forward to plead to congress to overwhelm the government. they came from both political parties and made it very clear that we were not interested in assigning blame, that we just wanted a solution. small businesses like m.c.a. who are draining our resources to cover the government's
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obligations, need to know whether there's a plan in place for expediting the payment of past due invoices when congress reopens the government. i'd like to end with a favorite quote. nobody can go back and start a new beginning, but anyone can start today and make a new ending. i urge the congress to work together in a bipartisan fashion, to make a new ending, one that benefits all of us. thank you very much for the invitation to speak today. i look forward to questions. >> thank you very much, ms. firestone. >> thank you, chairwoman landrieu and all the members of the committee, i really appreciate you having the foresight to have us come here and tell our stories and hopefully we will make it clear that this is devastating to small businesses. i am the founder and c.e.o. of a small tour operator located in salt lake city, utah. we operate tours and they are
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customize group travel tours for special interest groups. most of our tours operate within the western united states and consequently we include national parks, monuments and recreation areas in had almost all of our tuesday programs. it would be pretty hard to overstate the adverse economic affects this shutdown of the government and the national parks has had on the small businesses and entire communities of the western united states. i'm here not just to represent my company, which is managing to hang in there for the moment, but there are thousands of small businesses that are related to the tourism industry. it is an industry which is populated mostly by small and very small businesses. as a tour operator, we use these businesses on every program we operate. everything from hotels, attractions, motels, gift
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shops, restaurants. these businesses were immediately affected by this shutdown, and they are suffering and many of their workers will never see this money come back and certainly the companies won't either. this isn't something they're going to get back pay for. if you work in a restaurant and you make tips for a living and no one shows up to your restaurant, you don't get that money back. so it is the type of thing that truly has been difficult for the tourism industry. the first years of the 21st century have been very difficult for the tourism industry, and we have as a small tour operator out west still suffer from all of these. obviously the first one was the terrible events of september 11, 2001. it took us about three years to recover from that and fortunately we had loans from the small business administration to get through that time frame. the natural disasters that have come from hurricane katrina, which i'm sure senator landrieu would be more than familiar
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with, western forest fires, superstorm sandy and onto the economic difficult times of 2008 which just this year we've seen turn the corner where tourism businesses are coming back to where they were before that. people had confidence. they began to spend their money on travel again. and now we have the government shutdown of 2013, which is just one more devastating blow to the small businesses, not just in the western united states, but certainly throughout america. thank you. >> thank you. ms. poole. >> good afternoon, honorable chair, ranking member and members of the committee, i'm sabrina poole, president and c.e.o. of a small, disadvantaged information technology firm, providing i.t. consultant services to the federal government. so basically the federal government is our number one, you know, source. i'm pleased to be here today to
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discuss the impact of what the shutdown has done to my company. i can't even begin to speak because it's been quite from one extreme to the other. we had to lay off our billable and nonbillable staff which means that the current contracts that we do have that's ongoing where we haven't had to stop the work order, we don't have we don't have anyone to oversee the contractings. this mean ours revenue is going to be down and we are not, compared to large company well, don't have deep pockets where we can afford to have folks stay on the payroll so we were forced to lay off, we couldn't do like you did and keep them on the payroll for an extended am of time. the financial impact has been horrible. revenue rts -- revenues are down about 25% and continued to go down from there. most of our employees are not billable, which mean we was a big decrease in revenue and we will see this decrease for several months because as the
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government invoice cycle continues to progress, there's no orders on them, we think it will take about a year to recoup some of the loss wevs had. we worked for the last six months to capture work, which you spend six months capture, and we won the work. at the usda, the same thing happened, they pulled the plug. the state department has been ongoing for essential personnel. the i.r.s. pulled the plug. all my employees i now have them on unemployment. our staff has been laid off and they're going for unemployment benefits and there's a lot of talk about the federal workers being paid, i have yet to hear about the contracting staff so they know they will not be paid for this time off. ultimately, my fear is that a lot of my good employees, my good, qualified employees, will
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be looking for work in the commercial industry and some of them will have security clearances that can't afford to pay their bills, it will impact them as they come up from the investigation, because part of the investigation for security clearance you cannot be late on y bills and most of my employees have clearance. i'm concerned about that. my last point, i'm concerned that i'll be forced to close my business if a resolution is not reached quickly. myself and other small businesses may be forced to close our doors. and my fear is also, if one company closes its doors, then a handful of folks are impacted. if numerous companies, then it becomes the large business takeover which puts the small business exactly where we were before, where we fought other the last 10 years for me personally to get here. in conclusion, we have sacrificed, struggled and
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slowly made progress as a woman-owned small business. this is wiping away 10 years of sacrifice. i'm an i.t. expert, i can go back to work. it's not something i want to do, but if that's what i have to do, i will to feed my family. it is disturbing to me that the government has caused mine and other small businesses to lose employees and significantly impacted our revenue. how can we make up for the loss of revenue? how will our employees pay their mortgages and feed their families? and lastly how are small businesses supposed to survive? i agree with the rest of the panel members, i don't care about democrats or republicans, i just want a solution and i'm praying to god that one comes very quickly. thank you very much. >> thank you. mr. singh. >> thank you, chairman, members of the committee, for the opportunity to speak. i'm here as the c.e.o. and
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founder of a boston based startup that improves the efficiency of the buildings in which we live and work. in just over three years, my company has grown in idea to industry leader with over 32 employees and contractors. we help organizations across the country to find inefficient buildings and uncover savings. it reduces costs for owners and increases tenants' comfort. many of our customers management market rates. at the same time we're proud to have helped our home state of massachusetts identify over $300 million in potential savings. we also help local governments to better understander that expenses, including the city of new orleans and los angeles. we are proud participants in the american system of entrepreneurship. to allow a company like ours with innovation and hard work to thrive. we believe business should provide meaningful value in a
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self-sustaining way. our -- it relies on a supportive public sector. government has been vital. everyone many america knows the value of buying an energy star acompliance. -- appliance. the same thing is happening with buildings themselves. shows the more efficient buildings. the goth is helping the private market to work. the shutdown has prepted the e.p.a. from offering its energy star services. anyone relying on these tools is being forced to defer decisions regarding building efficiency upgrades. these upgrades create local jobs that cannot be outsourced. these are the jobs of the new economy. they can add to the economy. the shutdown is slowing the growth of this vital sector of our economy. we've investigated significant resources into creating
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technology. we've had to delay one contract and been fielding calls from concerned customers. for customer -- companies like ours, the investments we make come from a limited set of resources and we're sensitive to unexpected changes in cash flow. entrepreneurs and small business owners already feas tremendous odds and government has a role to play in fostering success. the current shutdown adds a significant amount of uncertainty to the market which increases our risk and makes it difficult to grow our business. thank you. >> thank you, mr. zing. i'm glad senator sheheen came in before your just before your testimony, she's been a leader here on this issue. ms. robinson. >> thank you. >> press your button and speak into the mike. >> sorry. thank you for the opportunity to speak.
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i wanted to let you know how much we appreciate the example that you have set in this committee for the rest of congress in working together and compromising to bring back 504 debt refinancing which is in the best interest of small business. the impacts of -- first i'm salary robertson, president of business finance group a nonprofit certified development company providing 504 financing in maryland, d.c., virginia, and west virginia. i'm also chairman of the national association of development companies and our 270 c.d.c. members do 95% of the 504 loan volume in the country. the government shutdown has had a very large impact on 504 lending. clearly there no new loan applications being aprude. one thing that's often overlooked is that we're fecksed asset financing so borrowers enter into contracts to buy fixed assetsful they have deposits at risk. if they're unable to meet
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settlement deadlines because they don't have financing in place or because other post-approval documents haven't been aproved, they're at risk of losing not only those deposit bus all the feasibility costs they poured into these projects and to say these borrowers are also expanding their businesses and losing opportunities for growth. if we are not able to get their applications release sod they can close on their transactions. additionally, 504 businesses create jobs and none of those jobs will be created. we fund our projects through a bond sale process. should the federal government default on its obligations, we have no idea what value that full faith and credit guarantee of a u.s. agency will be in the marketplace. we risk much higher rates for our borrowers forward into the future and we are very concerned that our november bond sale may not occur if
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s.b.a. doesn't return to work very shortly. our deadline is now for s.b.a. to be moving packages forward into the bond sale process. hundreds of loans are already closed on a nationwide basis in anticipation that sale will occur. should it not occur those loans will have to be reclosed at somebody's cost. unfortunately small businesses would have to pay for it. then we run the risk of, you know what is the perception of our bank partners if they don't receive their paydown in a timely fashion. will they charge small businesses more for interim loans in the future? and if investors feel it's not a dependable, timely product will they continue to buy at the same rate? we're looking at much higher costs for small businesses and that would be a tragedy, i think, for 504 program which is so valuable for small businesses that are expanding and creating jobs. thank you very much for the opportunity to talk today and
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i'd be happy to answer questions. >> thank you very much ms. robertson for that detailed explanation of how this program affects so many entities. mr. ford. >> good afternoon, thank you very much, madam chair and committee. my name is antoine ford, resident and c.e.o. of enlightened incorporated, a technology -- technology firm focusing on security, it's realized great growth in the last four years serving mostly the federal government. i'm here to tell you how the shutdown has reduced contracts. i am deeply impacted by the events that have unfolded over the last two weeks that forced our employees and family -- and their families to cope with the real till -- realities of the government shutdown. they know what it means to have
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their job affected by events out of their control. we have made choices in the way we manage human capital. permanent layoffs have become common place, forcing taos say fwoob to some of our best and brightest employees. we were forced to immediately furlough two employees due to loss of work at department of justice and another 25 in the 14 days since october 1. those not presently affected by the layoff live with the real danger of losing their jobs. meanwhile, they watch their elected representatives battle one another in a war of uncompromising positions. not only do i fear losing established personnel but my company faces an equally daunting challenge of attracting new tall don't a field in government that's become an increasingly unreliable employer for us. there are long-term effects to this shutdown. in the short and long-term, we will suffer with 70% of our
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work from federal government, it's impossible to have a stream of contracts from federal agencies that may have canceled, postponed or canceled again. we face -- our work has the -- faces the real possibility of not being renew wesmed cannot afford to wait and wait while leaders in congress negotiate our livelihoods. enlightened has provided services to several federal agencies, however, one customer in particular, o.p.m., is critical to my success. we are assisting them with providing background checks to federal government employees and contractors. to date this contract has not been affected but if it is stopped, enlightened would not be able to recover this could be the death blow for the company. as an i.t. and security provider, i am concerned. several agencies made contingencies for productive measures. their plans call to heavily
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scale down their i.t. teams to manage and maintain i.t. infrastructure. contingencies are seldom as strong as the original. agencies we do work for, department of veterans' affairs, h.u.d. and o.p.m. have had layoffs to cyberprofessionals that protect the nation's infrastructure. most other federal agencies are expect to have had similar handful of i.t. security staff to run the infrastructure and this is a problem. with the potential that the government will default on our federal debt, enlightened would not receive payments from our federal contractors, accounting for 70% of our business. in turn, we would not be able to pay our employees, our bills, nor our line of credit and just like congress, elect -- just like congress elected to shut down the government, we too would be forced to shut down and go out of business with no guarantee to recover. small businesses cannot borrow where there's no collateral. i'm here today testifying before you, representing the
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effects your decisions are having on everyday americans and small business owners like myself and countless other americans. we have to end this before the backbone of america breaks. this backbone is small business owners, entrepreneurs, the backbone is hardworking americans. let's put america back to work. >> thank you. mr. weatherly. >> thank you, chairwoman and thank you to my senator, senator shaheen, for having me here today. i'm president of provident bank, a commercial bank in new hampshire and massachusetts. we are a small business, 130 employees so we share in the concerns, the deep concerns of the small businesses around the table here. and the a loan program and 504 loan program are the backbone of what we do at provident bank. often times very promising businesses come forward have a lot of promise but don't have
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all the attributes that traditional lending serves and we use these programs to help them get over the finish line. currently, we have 12 loans representing $2.7 million in limbo just like mr. lay indcaretted, very similar stories, tradge exstories because these companies are not large corporate america that have lots of cash in the balance sheet to sustain. they live day to day, they wonder how they'll make payroll, how they'll keep the lights on. we're there to try to help with that. this government shutdown is impeding that process. i'm also concerned about the shutdown temporary move forward. i hope it happens, i hope it happens today. but i'm concerned also with what's coming up. february is the next sideline. this creates a lot of uncertainty. there's a lot of people affected by this. that uncertainty is going oaffect that in the future. you can rest assured that that uncertainty will have an impact
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on our economy, given the size of small business in that economy. and that's really why i'm here today, folks. thank you. >> thank you very much. particularly focusing on the uncertainty which is very important. r. paul? >> thank you, chairwoman, my name is ron paul, no relationship to senator paul or congressman ron paul. i'm president of a a bank headquartered in maryland. we are an active lend we are a strong loan growth inform 21% in 2012, a $3 billion loan port foal kuo and pride ourselves of having loan size of under $2 million and represent thousands of small businesses. we're very active in s.b.a. lending, we're a preferred s.b.a. lender and ranked number
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one amongst banks headquartered in metropolitan washington, d.c. nationwide, s.b.a. lenders close nearly $1 million in loans every day. right now the program is frozen. at eagle bank, we have over 30 new s.b.a. loans in process, totaling $37 million, but we can't pr pro seed because the s.b. ample has closed its doors. when they reopen, there will be uncertainty as to when loans will be ready to close since we don't know how big of a backlog there will be. among others, government contracts and their subcontractors and vendors, are not being paid. if you're a small business, a janitorial service or i.t. consultant, you typically don't have capital and reserves to carry your employees and overhead. the result, closed offices and laid off workers. the furloughed workers at a security company and restaurant across in from a government center and each of their mes
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just lost all their income. they no longer have disposable dollars to go to the local hardware store or local restaurant or local clothing store. this lost income can never be recovered. the government leases millions of square feet from the private sector. if the shutdown continues into november, these rent checks will not come in. but their loan payments are still due. potentially resulting in loan defaults and credit quality issues throughout the banking industry. another consequence to the shutdown is the impact on nonprofit organizations. because of the shutdown's tourniquet on funding, one of eagle bank's customers a youth cent for the district of columbia, had to furlough 90 of its staff of 145 people. the ripple effect is enormous. that's just dealing with the shutdown. now add all the potential consequences of not raising the debt ceiling in time. if congress does not act within
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days, interest rates will go up resulting in the likelihood of small businesses being less able to borrow money and at higher costs. investment values will come down. confidence will be severely shaken and the nationwide uncertainty result from any short-term kick the can down the road and nonlegislation will be devastating. consumer confidence already shaken, will dramatically fall. at eagle bank, we have let our customers and the local community at large know we will work to help them in this short-term cash flow needs. but every customer we work with who doesn't make a loan payment timely results in us having less cash to lend to our other customers. as interest rates rise, because of concerns over the stability of the united states, the value of our investment portfolio and therefore our ability to borrow to fund loans goes down. it is our hope for the sake of small businesses and the
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workers nationwide, the fuel of the nation's economy, that congress can find a way to reopen the government and enable people to get back to work. thank you for the opportunity to speak today and look forward to any further questions. >> thank you very much. i'm going to start with one question and throw it out and if you want to be recognized just stand up your pla card and then i'm going to ask each colleague to take a turn as well. let me acknowledge senator hagen and senator shaheen that are here, we did opening statements, would you prefer to wait for the questions? ok. you know, some of our colleagues first of all, let my say that all of your testimony was very critical to the immediate issue at hand and very compelling. giving me and the members that are here and others that are watching a great deal to think about. i've heard some people in washington describe the
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government shutdown as a pinprick to the economy. i didn't hear that today. from any of you. would any of you like to comment and just elaborate and underscore that what is happening is a great deal more than a pinprick or how would you describe what's happening o you if it's not a pin prick? >> i would be happy to address that. i have seen a number of studies, particularly the tourism industry is a major driver in 44 of the 50 states and as an economic driver the u.s. travel association released a newage sess that shows that this pin preck is now costing this travel industry $152 million per day an that's growing very quickly. it is affecting as many as 450,000 americans who have jobs in this industry.
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the national tour association did a quick survey after it started and showed that there were effects in all but four of the states by their 3,000 members and these effects are dramatic, immediate, and unrecoverable. but more importantly, this type of manmade crisis does create immediate effects for small businesses and all of their employees. but it creates long-term effects which everybody has talked to here that can even further depress the travel market going in the future which is our number one services export and we have a number of emerging markets such as china and brazil that are increasingly coming to america. we have finally started a brand u.s.a. program, it's about two years old, it's just starting to make an effect and this will have long-term, lasting, negative effects on all of those markets and certainly all
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of the thousands of small businesses that are parts of this industry. >> mr. lay, how would you describe it? does it feel like a pen preck to you? >> it's definitely not a pinprick. what's really important to convey, the small business owner is, when you go and borrow large sums of money, you put up and collateralize everything that you own in the world. everything i worked for my entire life is in, behind that loan, with the uncertainty created right now if interest rates go up 1%, on the size loan that i'm dealing with, over the life of hi loan, that's $76,000. that's an employee. that may be me not being able dofere the bank note. that's may be me not being able to make hi house payment. that's just one percentage point system of we go through this game in washington, we
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argue about raising the bet ceil, it's ridiculous. it has an immediate impact on our ability to not lose everything that we've put forth and risked. so in my particular situation right now, we're -- i had an excellent program to finance, if the interest rate goes up 2%, i may not be able to do that anymore. >> thank you, mr. lee. ms. robertson. >> in terms of the government shutdown being here in the heart of the d.c. and metropolitan area, we see in the newspaper yesterday two large defense contractors announce that they were going to reducer that upcoming layoff to 5,000 people. those people aren't going to get back pais once they're gone. they're going to have to pay for benefits out of pocket. thear not going to have money to spend on day care, on entertainment, all that trickles down to our main
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street businesses and the reality is that the conversation has been going on for months about the shutdown, about the problems, about the debt ceiling. c.e.o.'s have been taking that ointo account for months. they have been making quiet cutback, they've been making layoffs, they've been making furloughs. our economy has been suffering for months in this particular area. our lending activity is down 30% from last year. that's a large number. that's small bayses -- businesses that aren't buying buildings, aren't buying equipment to expand, aren't going to cree eat jobs. we think that this is much bigger than a small pinprick. we think it's a very major problem. >> mr. paul? >> thank you. i don't believe it's a pen preck, i think it's the beginning of a hemorrhage. i think that what we've experienced over the couple of weeks, the number of phone calls the bank has received from hundreds and many, many are now borrowers -- and many, many of our borrowers making
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sure they have lines of credit available to them. this has resulted in the bank making sure we have our own liquidity issues that are available to us to continue to fund these lines of credit. thing if you fast forward this, if we should get this passed through february, what's going to happen between now and february, i think, is going to be equally as ugly as what happened over the past couple of weeks. we have a situation right now that the consumer is going to be sitting and say, you know what, we're not going out to dinner, not going to the movie, not going to a show, not going to buy a house. new home sales will be dramatically impacted because you'll have people over the next three months that will be so pair noid about what's fwoning to happen. i think it's an embarrassment to this country. i think if the trickle down effect has yet to be feld -- felt, i think the economy that's final he starting to get on its feet will be devastated as a result of kicking the can down the road. >> let me get the other three of you, about the pin trek, tai
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-- pinprick, stay on that, but some people around here are say, we'll pay the federal workers back pay and that will supposedly solve the problem or make the problem go away. so when you answer this, talk about that as well because i think that's missing a big point that some of your small businesses, they're not going to be in that payback discussion. i don't think they're included in that. ms. robinson is that -- i mean, ms. smith is that what you're hearing? >> yes. >> lean into your mike, meeze. >> yes, i'm hearing that as well. yes, it is more than a pinprick. we have companies decreasing in revenue, we have many small businesses that may have to close their doors. small businesses, we're the lifeline of the economy and the key to recovery so yes, it's definitely more than a inprick.
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>> i would agree it's much more than a pinprick unless it's a very large pin. the majority of the employment in this country is by small businesses like the people we have around this table and like many of the clients i have at the bank and 2/3 of the economy is consumer driven. it was mentioned a moment ago about the uncertainty creating problems with that part of the economy. i believe that's real. i believe that's large. so this really is not a pinprick. >> mr. ford. >> i agree and to your point, senator, small businesses will not be paid for the work we've lost now that is lost revenue, that is going away. that will not return. if we look at contracts that we have, as soon as we do go back to work, those contracts will have to be modified because those contracts have deliverables that are time based. those contracts need to be modified which delays the process because we have to get new contracts and again that
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will not be paid. 8a company, an that time that is lost is lost. that won't be cheaged. if i'm an 8a company i would be concerned buzz that -- because that time is not coming back if we look at the concept of a pin preck, when we have to lay people off, when you have to look at in the eyes of people, you know about their family. that's not a pinprick. when you talk about people who may have to go on assistance of the government they don't trust anymore they lose confidence in small businesses which are the innovators of america. that is not a pin preck. we look at the fact that, enge as you talk about, my line of credit is based on the credit worthiness of myself and my partners. everything i've had over 14 years has been put into this business. my home has been put into this business. that's what my banking friend here used as collateral.
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if i go out of businessering everything that my three kids and i are working for goes away. >> and there's no reimbursing you for this. >> no, no reimbursement at all. >> we're talking not only about the shutdown but also this uncertainty about the debt limit and what interest rates, how they all affect all of you. now on top of hearing that it's a pin preck, i'm sure you've also heard that there's a number of amateur economists out there who have been telling us all that the debt limit can be managed by paying our interest. the debt limit, those are false, we don't need to worry about it. we recently had a hearing in the banking community where we heard from realtors who told us they believe if we miss this default deadline, home mortgages will go up at least 1% if not more and we're already seing our treasury is -- our treasuries being
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discounted as high as almost 70 bay sess points. so my question to all of you, we incrude this discussion, as you have, about what the debt limit means and this constant uncertainty and i really would appreciate comments on, you know, the proposal which a lot of you referenced, of only going out to february as opposed to looking at a long-term deal and encourage you to encourage us to look at something more than that to give you the certainty that you need. anyone who wants to comment on the debt limit, i would appreciate that. >> being that we are in a startup world on the web where i think they're venture backed and uncertainty is part of what we sign up for, in some sense. but we do assume that the full faith and credit of the u.s. government is something we don't have to be uncertain about. and the -- the decisions that
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investors make, the decisions that the capital markets make, reflect on what startups get founded. they reflect on whether they happen in this country or whether they happen somewhere elsewhere there is more confidence. and you know, i find it to be, especially when this is a manufactured crisis leading into manufactured crisis, these are things we can control and it's almost callous to call it a pin preck to the people who are directly affected and whether that means they're on government assistance and can't be part of the economy because they don't have income anymore or whether they get laid off from their job but also further town the line, all those people are engaged, all the maul businesses that are directly affected by products other maul businesses are producing, there is a domino effect, it's not just one business shutting down, it's five or six other businesses down the change that it affects. >> i think me comments are more lated to the short-term --
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>> push this down, if you would. >> for companies like min, we got a huge contract in october, it's expected we'll hire a lot of people, with which is great for the economy but do i have the confidence that in three months i'm not going to be shut down and then what happens to my business that i worked over the last 16 years to grow. it's hiring god people, we hire doctors, we hire nurses, we hire analysts, there's a lot of competition for that talent. and now i'm feased with having to hire which is a good problem, but on the other hand, how are we supposed to handle that? in three months, if we have to let them go. >> for the record, what would you pay a doctor or some of your medical professionals, like the range of what you're offering people in that contract? >> our average salary for our nursing staff, we do, we have nurses across the untry is somewhere in the range of $70,000 is an average salary. and the physicians, probably
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twice that. zun believable. mr. griswold. >> as i say many times, it's hard to overestimate the pain this causes to a lot of people. if we don't assure the american people and particularly the rest of the world that this isn't going to be a recurring event, we will have absolutely no confidence in traveling to america or even dealing with america if we get a little farther than that. nd that has been a jeent issue , a former employee of mine who sells to china said that compared to other countries that utilize creative ways to lure chinese tourest, the u.s. shutdown will shatter the confidence of international travel companies and that's been shown again and again that when we have bad events here,
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it creates long, long-term effects that will obviously affect all of us but most importantly we need to assure everybody that this isn't something that's just going to continue because if we have to do that every single time we go through this process, we will have no confidence to buy anything in america but more importantly, travel is a seasonal business. most of the companies i deal with, which are all small businesses, make their money very quickly in three or four months. those businesses have to have that profit in order to make it to the next year. so not only are we not going to be paid back wages, these companies may not survive to the next year when they're already planning for that travel season. >> i know there's never a good time to go through what we're going through but you can think about the particular month of november and december, october,
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november, december, being very substantial retail months, which everyone is aware of, you don't need, you know a special degree to understand that. and that is the season that we're coming into, some very seasonal and states that have seasonal activities. let me get mr. wesley and then we're going to turn to senator shaheen for her questions. >> mr. singh is absolutely right, investors and bankers make digs on certainty and predictability. and you can just walk down the hall and talk to your friends at the fdic and o.c.c. if you want clarification on that. but before the shutdown, our bank, like many paul's bank, experienced record loan growth, and we're a commercial lender really by trade and that means that small business had a lot of confidence and wanted to invest and wanted to borrow to do that investment.
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i'm very concerned about this temporary fix because that confidence is going to go away. and what has started to become a real, energized recovery is going to be stalled and i fear worst than that. that you can lull back into recessionnary times. which would be really unfortunate because i heard earlier the term manufactured and this is a manufactured problem. and that's too bad. i would like to see it end. >> senator shaheen. >> thank you very much. thank you for holding this hearing. thank you to each and every one of you who are here representing your businesses and the small business communities in your states. i have heard from so many small business people in new hampshire which has 96% of our employers are considered small businesses. who are experiencing the same kinds of challenges that you have talked about today.
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i want to especially recognize chuck, the president of provident bank which has four branches in new hampshire and does a great job of lending and participating in the s.b.a. lending program. so thank you for being here as well. i want to make a point of saying to all of you that i think every one of us here are as frustrated and upset about the irresponsible and reckless behavior on the part of some members of congress that have led taos this point. and we all believe we need to start the government back up immediately that we need to put in place a long-term solution to raise the debt ceiling so that we can reassure not only people in this country but around the world that america is going to pay its bills and that we should end these manufactured crises and get on with the business of governing the country. so please know that every one
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of us here is working toward that end. and very distressed as i know all of you are. chuck, i want to go back to your initial testimony where you talked about some of the lobes that are being held up because of the shutdown. do you also have new borrowers who are coming in the door who you can't help? and when you look at the kinds of projectser that looking for help on, do you expect those will be able to continue after the shutdown, that you'll be able to help them? or are we looking at loverple impact for the people you're working with? >> well, that's a great question. we're seeing continual need for the s.b.a. loan program. just because of the shutdown doesn't mean people weren't coming in after the numbers i gave you were in the process and stalled. there are a number of folks looking at business acquisition
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opportunities, permanent working capital and equipment that are stalled as well. what do i see? i see perhaps some of those still coming through but others not. day in and day out, if it's for permanent working capital and weeks on end go by, opportunity goes by as well. i also worry about one in particular that is the purchase of another business, owners that are retiring, they could sell out to a large concern. if they sell out to a large concern, employment goes away, basically. but if they sell out to another small business, they're like lig to keep employees. a purchase and sale can lapse and renegotiate -- renegotiation can occur. then all of a sudden the game has changed for both small businesses. and everybody around this table knows what i'm talking about. so you lose credibility if you can't deliver, right?
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so that's a big problem. also we embarked on a microloan program, in fact we hired a specialist to take this on, and literally was about to launch. it's really $10,000 to $100,000 loans for the micro small bayses of -- businesses of the world and everybody around this table knows at some point you were there. we had a very abbreviated process, we were about to launch it, literally this week. and we have stalled that because it is based on the use of the a loan program. and that's real. that's a real issue. and that's problematic. do i see that coming back, senator shaheen, i do, because we really want it, but it is pred dated -- pred kitted on the u.s. government getting back to work and s.b.a. loans being available. >> thank you very much. >> senator.
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>> thank you for your comments and for putting a face to the issue. you hear the numbers, thousands of people, hundreds of thousands of people, millions of people but physical you put a face on it so people can recognize its their neighbors, their community that's been impacted, it makes it difficult. i urge you, i'm interested about the specifics of those companies not able to completer that loans and the impact it has oner that commeck growth and future. you talk about consumer confidence which is a driving force in our economy. there's been studies done that as a result of this manufactured crisis, consumer crisis is worse than any natural disaster, worse than after the terrorist attack on our country on 9/11. the challenge here, what i want to get you engaged is, yes, we
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want to make sure government is open, we want to make sure we don't the fault on our obligations, but the best case scenario right now, knowing where we are on this day is that we will work out some short-term solution to keeping government open and paying our bills and to negotiate hopefully a budget agreement. if that happens, the pressure has to remain on "king kong" to get a budget agroment so we eliminate this short-term governance from crisis to crisis. consumer confidence will only be restored if they believe that we have our act together here. i would just urge you not to leave the debate late they are week if we are successful in getting government open and not defaulting on our debt, but to get engaged in the process of working out a budget agreement for this country and i agree with those of you who said,
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look, you've got to come together, democrats and republicans. democrats are going to get their -- aren't going to get their way, republicans aren't going to get their way, but those who say they won't compromise are the ones who are driving this country to the brink of disaster. we've got to be able to make the system work and compromise and get things done. so i would just urge you to do this. let me just reinforce the point that you made, the small company that won't get its microloan and may have discovered a new way of inknow vating and -- innovating in cybersecurity or in the service industry, that's competitiveness that's forever lost in america. and that young scientist who might have gone into n.i.h., might have gotten award this year but buzz of the government shutdown that award was not come who yooze -- chooses to go to a different field or different country, that's lost forever.
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we've hurt ourselves. there's no question about the permanent damage that's been done to individual businesses and to the competitiveness of america. but we all have a responsibility to figure out a way to get beyond this and as frustrating as it is for you, it's just as frustrating for us, i agree with senator shaheen, i don't understand how people could deny government staying open and paying our bills, why they would want to put that on america. but we are where we are. o i guess my comment if anyone wants to further identify the type of companies, i think that would be helpful, put more of a feas on this. let us know the types of businesses who can't get loans 1ru89 of this and what that means in rockville. make it as personal as you can to your community, that would be helpful to us. >> mr. paul. >> senator, thank you for all
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the great work you do in our great state of maryland. one topic that i think is important as you've all heard from the small businesses, small business owner is that they put up everything that they have in order to borrow those funds. as we all know in 2008 and 2009, when the value of real estate plummeted, it was very -- there was very little equity remaining in their homes. so now, which i believe will happen over the next few months, especially if we're just kicking the can down the road, consumer confidence will drop, very of homes will go down, that home equity is going to dis-- dissipate. what happens to that borrower trying to start a business or a current borrower looking for an s.b.a. loan that doesn't have equity in their home any longer? so that exy the they've been able to leverage against, which this country has built itself upon by being able to borrow through the net worth of what
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you have, primarily your home, goes away. i just believe, i'm not an economist but i speak to enough that i do believe interest rates will go up. i think whatever appreciation we've seen in real estate values are not necessarily as a result of real estate value going up but the fact that you have interest rates going down and their ability to buy homes has encreased. when that equity drops and interest rates go up, i think you'll be back to a recessionnary discussion in terms of the slowdown in our economy. and you're absolutely right, this is not a democratic, this is not a republican issue. this is a u.s. issue. i think that the embarrassment we've caused ourselves, who knows whether or not -- we all know listening to chairman bernanke in terms of how we artificially have dropped interest rates, we have only been able to drop interest rates because our international friends have been willing to buy our debt. are they going to continue to buy our debt under the current circumstances that we're in? i think not at these current levels. it's not worth the risk. therefore i think that will be
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one more reason that rates will go up. i think this is -- as much of a macro issue as it is a micro issue. >> thank you. . robertson and then pll ford. >> i have a couple of 504 stories i would like to share, one is a borrower in owings mills, maryland, they're constructing a new holiday inn express that will create 20 new jobs. they have been through due diligence for a construction project. heir loan ap by -- application is sitting at the s.b.a. they'll depend on the tourest season and if they dent break ground soon they won't be open in time for the tourist seasoned and will lose money their first year. that's detrimental to a small business. a couple of clients in massachusetts, one for an existing 504 borrower
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purchasing a second location for expansion. they're purchasing an unused building. they have posted a $490,000 deposit that they'll lose along with the opportunity to build the building at this disdowned prees and 25 new jobs that would have been created. we have another a printer that needs a new and bigger printing press that won't fit in his current speas he has a $35,000,000 foss sit on the deposit nd a $35,000 on the printing press, if he doesn't get the loan soon he'll lose both those deposits and two jobs the would have had.
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it's just encredible. >> i would just add, mr. ford, i'll get to you in a minute, the loss of machinery and build sgs heart wrenching and devastating to families but the loss of faith in their government, it's hard to measure. mr. ford? > i'll be quick on these other populations. senator car den you talked about technology. we're looking at programs, the stem program, where we as a country are woefully behind in the technology area. those programs aren't being funded. people doing research and development in cybersecurity where we want to protect our country, those are going out of bezz. sbir's that have done a great deal to advance this country are doing anything. those companies in those areas are companies that are going out of business. companies moving the needle for this country are not being supported. those are some of the faces being impacted by this country. >> senator hagen, and we're
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going to close at 4:00. we have about 10 more minutes. >> thank you, madam chairman. this is a very important meeting. i think everybody here and i hope the nation, understands how we feel that this is a manufactured crisis. that doesn't need to take place. and it is from my standpoint very disturbing to hear the stories, the real stories that are happening across the united states each and every day especially with our small businesses. mr. singh, your comment about the risk that you take in your business is a risk. that you're willing to take, it's a calculated risk, there's going to be good days and bad day bus you shouldn't have to calculate into that risk whether the united states government is true wits full faith and credit of the debt and the borrowing that we owe. that shouldn't be part of the equation at all, ever. senator land rue, our comment
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too, along with mr. griswold, about the tourism standpoint and seasons. in north carolina right now with the national parks closed there's a report that's come out that says the great smoky mountains national park just the first 10 days of that closing, affected $33 million in lost revenue just in the western part of north carolina. you add that to the fishing off the coast of the -- of north carolina and the camp fwrounds that are closed in our national parks and the number of visitors that, you know, were going to go hike in our national parks, stay in the local hotels and restaurants, they're not doning that. why go when all the areas are closed. once again, an irresponsible, manufactured crisis. this is not the floods in south dakota, the snow. this is something that we should be eable to take care of without a second thought. ms. smith, in north carolina,
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we have the third largest military footprint in the nation and i know we've got about 8% of our populations employed as civilians by the department of defense, 416,000 jobs, following secretary hagel's decision to recall most of these furloughed workers, do you have any understanding of thousand the department of defense is providing fwoidance on any -- on how they intend to proceed with new contracts that are currently in the pipeline? no -- >> press your button please. >> we have a job fair on the 2nd of october and we're getting ade for some big contracts that are going to come out real soon and i mean in the fur -- then the furlough happened, we're going to go ahead and hold the resumes, there's nothing else we could to with them. a lot of contracts are definitely on hold.
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that's what we're getting. >> and one again that has such a detrimental impact to small business. >> yes, it does. >> does anyone want to comment on the dept of defense, exthe reason the senator asked, not only sit important in her state but it's such a huge buyer of goods and services, we want people to understand even if every federal worker came back to the department of defense but don't give a signal to your contractors you partners, enge in every department but particularly in this department, it's significant, make mr. ford you want to comment, mr. paul, then i'll end with one question. >> i think as you know, being a d.o.d. contractor, the excellence you need to provide is high. we're talking about protecting a war fighter. the uncertainty that we face is what services that they need to support. -- as warfare has
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cheaged, it's the change in technology and processes that d.o.d. requires to ensure our war fighters have the best. when we talk to d.o.d. clients we say you have to wait, because we don't understand what we can do. we've been engaged over the last year to 18 months in what types of services we can offer to them. they obviously like various contractors, or we wouldn't be here, but we don't know how to proceed. we don't mind uncertainty but it needs to be certain on one side of the other you know you need the services, you don't know when and don't know how. >> and we don't have a budget and haven't had a long-term budget. mr. paul and then i'll get senator shaheen for a question. >> we all know how important the construction and home building is to our economy and the realignment taking place in the state of maryland is enormous. we have a number of construction job that have taken place in the areas
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throughout the state of maryland and what we've seen very quickly is a drop in draw requests that are happening from the home builders because they're not being able to have the home construction and the home sales taking place system of clearly right away we're seeing, just over the past few weeks a drop in their draw requests and demand in housing. >> senator shaheen. >> thank you madam chair. i want to make the point for all of you who are involved with government contracting, with the department of defense, that this is not the first hit that folks have gotten. this comes on top of sequestration, those automatic cuts which have already had a huge impact in the state of new hampshire, the defense based accounts for 17,000 employees, about $1 billion in payroll. in economic activity. so it's a huge impact. and this is really a double
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whammy. >> excellent point. i'm going to end with two questions very briefly, the fers to mr. singh and if anyone else wans to chime in, i think a lot of people up here besides thinks this is a pen prick, not really hurting anyone, it will go away shortly and we'll be back on the road which i think you all dispeled in your comments today very well, but a lot of people are also saying, well, shutting down the government is saving the taxpayer money. could you please explain from your perspective how that is absolutely -- this is not saving the taxpayer any money talking about maybe a few of the businesses that you know that are now closed down that if left to operate could actually save the taxpayer money but they're being held back. >> sure. i think first of all,, if you're going to give back pay to the people you're not letting work that's not ceying a whole lot of money it's just
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making their lives harder system of we work with building efficiency and we're seing that a lot of folks who might want to get loans to invest in improving their buildings, they're not going to be able to get loans so easily, their not going to want to think about it. there's an entire network of small businesses that want to help improve efficiency in this country. and if they can't rely on small businesses if they can't basically revitalize this sector of the economy, we rely on growth as our mechanism for moving things along. we can't just say, everything is ok as is. particularly in these areas where our country really needs improvement, not just in economic perspective but from a environmental perspective, from a essential perspective. all we're doing is delaying our ability to implement change and improves. we've found that for folks we are talking to who would be interested in engaging orse with these sorts of activities,
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they might stale be, we think they will be in the future but it's on hold for a while and we don't really know for how long. >> ms. forestton, let me get you to answer that. ? i think one of the ways you saw in my testimony, we save money every day that we work. we're in the business of efficiency and just to kind of give a face to how deep this ripple effect is going, we have injured workers, injured civilian workers who are now working who we get calls on a daily basis, doctors will not see them because they don't ust they'll be paid by the federal government. so as long as we can't implement our programs, we can't do what we do best and that is save money, save lives, save productivity. and i was just handed a statist exthat astounds me as far as the pinprick. that there was a study that just came out from the economic
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policy institute that said that they're predicting about 900,000 jobs a year would be lost due to sequestration and budget uncertainty if we can't turn this around. to me that's not a pinprick. thank you. >> thank you. let me put in the record, and >> this is the government shutdown could be expensive for taxpayers. it says the answer might not be bha you expect. many experts estimate the shutdown will cost, not save, taxpayers and the bill could be steep. the last government shutdown in 1995-1996 cost $1.4 billion. that's more than $2 billion in 2013 dollars. that's just a short-term shutdown. that's not the default or the good faith and credit of the united states. that's not the lack of a long-term budget. this is a very serious situation. and my final question, because so much of the press has been focused about big cities,

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